Buying a house is undoubtedly a big step, from many points of view but above all from a financial perspective. This is because in a single transaction a sum of money is mobilized that could be worth the equivalent of several annuities of your income on its own.
So, what are the tools that could be useful for you to get all the liquidity you need to buy a house? First of all, the mortgage loan with which you can finance a substantial part of your purchase.
Secondly, your employer might help too. How? By granting you an advance on the severance pay.
The severance pay is a sum of money that increases every month of work and there is the possibility of requesting a part already accrued, provided that the request for an advance is needed for the purchase of the first home.
To request the advance of the severance pay for the purchase of the first home, it is necessary to follow certain steps, which we will now analyze step by step.
Below, we show you everything you need to know about the severance pay advance request.
TFR advance for the purchase of the first home: everything you need to know
The advance of the severance pay, in general, can be requested without giving specific reasons to one’s employer – who can thus freely decide to grant it or not – but it must compulsorily be granted in three cases :
- Buying or renovating or building your first home, for yourself or your children
- Health costs for extraordinary interventions recognized by the competent public structures
- Expenses incurred during parental leave, study or training leave
As far as we are concerned as an argument close to the real estate sector, the advance of the severance pay can therefore be requested by employees to cover the expenses related to the purchase of the first home. But please note: this is a right for all employees who have reached at least 8 years of seniority.
Let’s analyze in detail all the useful information for the severance pay request:
Let us now continue by examining each point together.
Who can apply for it? The subjective requirements
Not all employees can request an advance on the severance pay. As we have already said, according to current regulations the request can be made by those who have been working as an employee for at least 8 years with the same employer. Furthermore, the request for an advance of the severance pay must not exceed 70% of the treatment to which the worker would be entitled in the event of accrued liquidation.
It is necessary to take a further step that is a selection between private workers from public employees: this diversification implies different criteria for the request for an advance.
As for private workers, the allocation of the severance pay follows some basic rules:
- If the workers have allocated the TFR in the company, the employer can refuse the request, in the event that more than 4% of the company workforce has already obtained the advance of the TFR
- In the event that the severance pay has been allocated to a pension fund, on the contrary, there is no limit to the number of members of the fund who can access the advance.
In any case, compliance with the 4% limit is not mandatory for the employer, as the company can also decide to approve more than one request.
On the other hand, as far as civil servants are concerned, the question is more complex, since there are ambiguous indications.
In this case, some of the public employees hired before 2001 are subject to TFS – that is to say, Termination of Service – instead of the TFR. In fact, according to current regulations, it is not possible for this group of workers to request the advance payment of the TFS in any case.
The approval of the advance request can be obtained if the purchase of the first home concerns oneself or one’s children, while it is not recognized as valid if it concerns the purchase of the second home.
How should the request be made?
To apply for a severance pay advance for the purchase of your first home, you will need to submit a specific form. Remember that the request cannot be submitted more than once for the same property, but only in the case of sale and repurchase of a new home.
Specifically, the written request must be delivered by hand or sent by registered letter to the employer and must contain:
- Your personal details
- The request for an advance of the severance pay
- The number of years you have worked for the company
- The percentage of the severance pay for which you want to request an advance
- Date, place and signature
Once the down payment request has been delivered, the employer will be responsible for dealing with it. While you will have the obligation to prove that the request was made for the purchase of a first home. To do this, it is necessary to present a notarial deed or a replacement document.
If the request is accepted, the employer must sign the request for receipt and acceptance. In the event of refusal, the employer must in turn reply to the employee in writing.
How much can you ask for and in how long?
As for the response times to the request, it is usually necessary to wait a few days for the employer to deal with it, carrying out the necessary checks and then processing the payment to the worker.
While as regards the amount, there are limits that depend on the destination of the TFR:
- Those who leave the severance indemnity in the company can request the payment of up to 70% of the sums already accrued
- If, on the other hand, the severance pay is allocated to a pension fund, it can be paid up to 75% of the sum already accrued.
Mind you: since the severance pay is an early payment, the sums requested in advance will no longer be paid at the time of the end of the employment relationship.
Taxation on the severance pay advance for the first home
For the advance of the severance pay, the separate taxation regulated by article 17 of the TUIR applies.
According to the current rules, the principle of fairness of taxation is imposed, according to which the income produced in several working years is not taxed according to the annual reference rates relating to the collection period, but taking into account an average rate.
Article 19 of the TUIR provides for new provisions regarding the separation between annuity or revaluation and capital. In practice, the annuity is taxed at an annual rate of 11%, while the capital is taxed only at the time of liquidation: initially on a provisional basis by the employer as withholding agent; at a later time definitively by the Revenue Agency.
The new provisions concern only the part of the TFR accrued since 2001. While for the part accrued up to 2000 the provisions of art. 19, of the previous TUIR.
Therefore, a distinction must be made between the TFR accrued up to 31/12/2000 (i.e. taxed according to the old rules) and the TFR accrued starting from 01/01/2001. In this case, it is necessary to separate the items relating to the severance indemnity set aside and the revaluation:
- The revaluation is subject to an annual substitute tax in the amount of 11%
- The severance indemnity set aside is taxed, upon disbursement by the employer, provisionally according to specific criteria
- The Revenue Agency then proceeds with the definitive taxation based on the overall average income that has been declared by the worker in the last five years prior to the accrual of the right to the TFR.
- In the case of a request for an advance on the severance pay for the purchase of a first home, for oneself or for one’s children, the tax is fixed at 23%
Here is what it takes to request the advance of the severance pay for the purchase of the first home
To take an important step like buying a house, any source of liquidity can be extremely useful. The request for an advance on the severance pay for the purchase of the first home will thus allow you to obtain a substantial sum of money to be able to conclude the real estate purchase deal.